What is Property Damage Liability?

January 17, 2018

If you think about it, property damage is the best-case scenario in a car crash. Nobody died. Nobody got hurt. The other driver’s car just got a little banged up. No big deal, right?

Well… that depends. Property damage can be more expensive than you think. Repairs are getting more expensive, too, because of all the sensors and technology included in new cars. When someone’s vehicle gets damaged in a car wreck, and it’s your fault, will your property damage liability insurance cover it? Here’s what you need to know.

If you just need good and cheap car insurance that includes property damage liability, go here. Compare.com will get you free, personalized quotes in a flash.

What is Property Damage Liability?

Property damage liability is the often-overlooked part of your car insurance that pays for damage to other people’s property from an accident you’re responsible for. Most often, it’s paying to repair other person’s vehicle, but it could also pay for damage to a garage door, a mailbox, a bicycle, a fence… or all of the above, if you really go on a rampage.

If you damage someone else’s property in a car accident, here’s what happens. The property owner will file a claim with your insurance company for the amount of the damage, then get a check directly from the company. If the claim is for more than your insurance covers, you may be responsible for paying the rest.

Does Property Damage Liability Cover Damage to my Own Car?

Nope. If your car gets messed up in an accident you cause, your collision coverage will pay for the repairs. If your car is damaged by some other circumstances, such as a hurricane, flood, hailstorm or collision with a deer, comprehensive coverage should pay. For an accident that’s someone else’s fault, you would file a claim with that person’s insurer.

How much Property Damage Liability Coverage Do I Need?

First of all, that depends on where you live. Every state (except for New Hampshire and Virginia, where it’s not mandatory to have car insurance) requires drivers to carry a minimum amount of property damage liability. The exact amount varies widely. The highest required amount is $25,000, and the lowest is just $5,000 (in California, Massachusetts, New Jersey and Pennsylvania).

If you’re trying to keep your overall insurance premium low, you can opt for the state minimum property damage insurance. And that might be plenty! In 2016, the average auto insurance claim for property damage was $3,683. Not only that, but just 3.9 percent of people with liability insurance had a property damage liability claim that year, according to ISO.

Knowing this, you might decide the state minimum for property damage liability is plenty for you. If there’s a 4 percent chance of someone filing a claim against your property damage insurance, and if the average claim is well under your limits, then you’re probably good.

Then again, the average new car costs North of $31,000 now. If you cause an accident that totals or extensively damages two newer cars, you could be looking at claims that go way beyond what minimum property damage insurance will cover.

You may want a policy with more than the minimum coverage if:

You have a history of running into/over/through things with your car. Hey, we won’t judge…

You live in a busy urban area where tight parking and heavy traffic make it more likely you’ll hit someone’s car

You have assets to protect, and you want the peace of mind of having solid insurance protection

What’s Uninsured Motorist Property Damage Coverage?

You’re getting ready to go into work one morning when you discover deep gouges and scratches all down the driver’s side of your car. Some jerk side-swiped your Honda last night while it was parked and kept on going. Now what are you supposed to do?

Property damage caused by a hit-and-run driver (or one without insurance) can be covered by UMPD: uninsured motorist property damage. Some states require UMPD; some states make it optional; and others don’t offer it at all. It also overlaps with collision coverage, so you may not need both.

How Can I Find Cheap Property Damage Car Insurance?

Property damage liability isn’t really sold on its own; it comes as a package with bodily injury liability (the part of your auto insurance that pays for other people’s medical bills). The best way to find the cheapest insurance package is, of course, to compare free, personalized quotes on Compare.com.

We’ll ask you to pick one of four levels of coverage: State Minimum, Basic, Plus or Premium. As a starting point, try state minimum to get the cheapest insurance quotes. Then, see how your quote differs when you opt for Plus, which will increase your liability coverage (and add other benefits too).

Here’s an example. A Missouri driver with a clean driving record opts for 25/50/10 state minimum coverage, which has $10,000 in property damage liability. Her best insurance quote is $56 per month, paid up front. Remember that quotes are affected by many factors and yours will be different.

But she feels she needs more, so she upgrades to Plus: that means she gets 50/100/50 coverage, with $50,000 in property damage liability. Now, her best quote is $124 (that includes collision/comprehensive as well as uninsured/underinsured motorist coverage). Is it worth paying that much for better auto insurance? Only you can answer that.